City pares down budget deficit

The City of Hood River has shaved $394,000 off its $1.17 million budget deficit — the first step in a three-year plan to get back in the black.

“It has been a real team effort by the department heads to take a look at their expenses and cut back where they could,” said Bob Francis, city manager.

He anticipates that another $260,000 will be loped off the budget for fiscal year 2007-08. Francis said each department supervisor has been challenged to trim his/her budget by 10 percent this year.

In addition, the city has recently increased several fees — and established a new one — to help stabilize the general fund budget.

In 2006, city administrators began billing each department for time spent on its issues. Money in the dedicated accounts is only allowed by law to be removed for a specific purpose, such as road maintenance. However, Francis said it is permissible to charge these accounts for oversight and that was one way to replenish the general fund.

For example, the city, as a utility provider, can generate about $95,000 per year by charging a franchise fee to its water and sewer accounts.

In another move, the city tripled most planning fees and began charging another $100 for ambulance transports.

A fire suppression fee of about 50 cents was added to monthly utility bills. And a stormwater maintenance fee of about $2.50 per household took effect Sept. 1.

“We are trying to charge the true cost of these services to offset our expenses,” said Francis.

While all is looking up in most areas of operation, he said the municipal court and ambulance budgets continue to run in the red. Currently, uncollected court fees total $136,000 and unpaid ambulance rides about $116,000.

“There is a lot of money out there that needs to be collected. We have to just tighten up a little on people who don’t pay their bill,” said Francis.

He anticipates that it will be easier to go after delinquent accounts with municipal court now being overseen by Steve Everroad, city finance director, and Alexandra Sosnkowski, city attorney.

Francis said the police department needed to be relieved from that duty in order to properly separate the powers of government. And since Everroad monitors the fiscal end of the court, he will be able to expedite collections.

The city council had directed Francis to ask the county to help supply and maintain the ambulance service. Francis said 30 percent of the calls for medical assistance come from outside the city limits. Therefore, the council believes that, since all county residents benefit from having medics on standby, the costs need to be distributed more equitably.

“I think we should be able to work something out,” said Francis.

In other good financial news, he said the building department revenue has increased from $325,000 in 2005-06 to $460,000. And parking revenue from $170,000 to $175,000.

The water and sewer budgets are also up from $1.3 million to $1.6 million.

Francis credited these healthy balances mainly to the payments made by developers for infrastructure upgrades.

However, he said these positive cash flows are going to be faced with some challenges as early as next year. The federal money to offset the decline of timber harvests in national forests is not expected to continue. So, the city has to prepare for the loss of about $200,000 in annual funding.

And then there is the $20 million cost to replace 12 miles of aging water line. Last December, the city increased water rates by an average of $5 per month for residential users. The extra capital is being used to repay a $4.5 million federal loan to start the process of replacing a 76-year-old water main.

Another 7.5 percent increase is expected this year to cover another loan installment of about $4 million on a 40-year repayment plan.

The work is being done in five phases and involves replacing the line from the city’s water source near Lost Lake to the reservoir on Riverdale Drive — and building a new chlorination plant.

Since the early 1990s, the city has been forced to spend increasingly more time and money in order to keep the only access to the water source up and running.